Debt Review Pros and Cons

The primary advantage of debt review is that it gives you a manageable payment plan for your debts. Debt review will reduce your payments to a level that doesn’t cut into your living expenses.

This means that you can pay off your debts without sacrificing your quality of life too much, which in our book is a definite win. Your interest rates will most probably also be reduced, in most cases, to below 1%.

Debt review provides protection from creditors. The creditors may not hassle you during this time, and your debt counsellor will take over all communication with creditors on your behalf. The pros of this is that you get to relax while an expert takes care of everything. 

Debt review also provides protection from asset repossession and legal action. Debt review is designed to help over-indebted consumers become debt-free and has the ability to protect you against asset repossession, legal action, and creditor harassment.

Debt review provides a legal path toward debt freedom. The creation of a reduced and consolidated debt repayment plan is one of the most important parts of debt review.

When you are accepted for the program, you have a guarantee of reaching your debt-free future once you’ve done the work by completing the process without missing instalments.

The debt review process does not leave a permanent record on any consumer bureau database. Unlike other avenues or administration, there is no permanent record of your involvement in the process. Your debt review status will be completely erased once you are declared debt-free.

Once you are legally under debt review, a notice goes out to all credit bureaus to ‘freeze’ your access to new credit. This means that you cannot take out any further debt until the debt review process is complete.

Not all debts may be included in the debt review process. Some debts, such as debt towards SARS, some medical bills [not all] and utility bills may not be included in the debt review process.

In some cases, it may not be possible for you to apply for debt review. When you apply for debt counselling, your ‘indebtedness’ is reviewed to check whether you meet the necessary criteria to qualify for debt review. A key qualifying factor is that you must have a steady monthly income to qualify for debt review. It should also be noted that any accounts that have passed the “10 working day period” after receiving a Section 129 letter, will not be included.

There are costs associated with undergoing debt review. These fees are regulated by the National Credit Regulator (NCR) and are included in your repayment plan. For some, it can be hard to swallow paying small additional service fees (such as the regulated R50 application fee or the aftercare fee while in such a difficult financial spot) but at the end of the day, if you add up the fees and compare them with what you will save on interest, it all makes more sense. These fees are not paid upfront, and with Sandton Debt Counselling, if you do not qualify, we will not charge you anything.

If you are considering debt review, it is important to find the best debt review companies to help you through the process. Not all companies are dedicated to help their clients the way they should. Here are some tips for finding the best debt review companies:

Research debt review companies to find the best one for your needs. Look for companies that have a good reputation and are accredited by the National Credit Regulator (NCR) and also another regulatory body like the Debt Counsellors Association of South Africa (DCASA)

Check the fees that debt review companies charge. All debt review companies charge fees for their services. There is not a set fee as each individual that applies for the process, will have a different, but regulated fee structure. For more on the fees, go to the NCR website and if you are unsure, give Sandton Debt Counselling a call.

Reading reviews can help you make an informed decision about whether a company is the right choice for you. Here are some things to look for when reading reviews:

Look at positive reviews of all debt review companies. Positive reviews can give you an idea of the benefits the company will offer and how it has helped others. This should always be your first step.

Look for negative reviews on the company you want to go with, but also ask the company many questions. If the agent you speak to is hesitant to answer or does not know the answer to your question, drop the phone and move on.

Debt review is a process that allows a debt counsellor to take control of your finances, compile and consolidate your debt, and create a comprehensive plan aimed at ensuring that you can repay all of your debt in an affordable manner while being protected.

The primary advantage of debt review is that it gives you a manageable payment plan for your debts. Debt review also provides protection from creditors, asset repossession, and legal action.

It provides a structured path toward debt freedom and does not leave a permanent record of your debt review status. The potential drawbacks of debt review include a credit freeze, not all debts may be included, and not everybody qualifies for debt review.

When considering debt review, it is important to research debt review companies, check fees, and check customer satisfaction ratings. Reading debt review reviews can also help you make an informed decision about whether debt review is the right choice for you.